Financial Focus Should Inflation Affect Your Investment Moves? their goods such as firms that produce However, Treasury Inflation-Protect- As you know, inflation heated up in 2021, following years of pretty stable - and building materials or supply steel or other ed Securities (TIPS) can provide some pro low numbers. And now, early in 2022, we're still seeing elevated prices. As a con- sumer, you may need to adjust your ac- tivities somewhat, but as an investor, how should you respond to inflation? First, it helps to know the causes of this recent inflationary spike. Essential- ly, it's a case of basic economics strong demand for goods meeting inadequate supply, caused by material and labor short- counteract the effects of rising prices, you ages, along with shipping and delivery logjams. In other words, too many dollars chasing too few goods. Once the supply chain issues begin to ease and consumer spend ing moves from goods to services as the COVID-19 pandemic wanes, it's likely that inflation will moderate, but it may still stay above pre-pandemic levels throughout affect other types of investments? Think commodities to other businesses - can do well. Conversely, companies that sell non- essential goods and services, such as appli- but this principal is adjusted based on ances, athletic apparel and enter tainment, may struggle more when prices are rising. Of course, it's still a good idea to own a So, during periods of inflation, your prin- variety of stocks from various industries be- cipal will increase, also increasing your cause it can help reduce the impact of mar- interest payments. When inflation drops, ket volatility on any one sector. And to help though, your principal and interest pay- tection against inflation. The face value, or principal amount, of each TIPS is $1,000, changes in the U.S. Consumer Price In dex. ments will decrease, but you'll never re- might also consider investing in com panies ceive less than the original principal value that have a long track record of paying and when the TIPS mature. Talk to your finan- raising stock dividends. (Keep in mind, though, that these companies cial advisor to determine if TIPS may be are not obligated to pay dividends and can appropriate for you. reduce or discontinue them at any time.) Apart from stocks, how can inflation Ultimately, inflation may indeed be something to consider when managing your investments. But other factors - es pe- cially your risk tolerance, time horizon and about bonds. When you invest in a bond, you receive regular interest payments until long-term goals should still be the driv- the bond matures. But these payments stay ing force behind your investment decisions. 2022. Given this outlook, you may want to review your investment portfolio. First, consider stocks. Generally speaking, stocks the same, so, over time, rising inflation can A solid investment strategy can serve you can do well in inflationary periods because eat into your bond's future income, which companies' revenues and earnings may increase along with inflation. But some sectors of the stock market typically do bet- bond before it matures. The impact of ter than others during inflationary times. Companies that can pass along higher costs longer-term bonds because of the cumula- by your local Edward Jones Financial Advisor. to consumers due to strong de mand for may also cause the price of your bond to drop a concern if you decide to sell the well, regardless of whether prices move up or down. inflation is especially sharp on the price of This article was written by Edward Jones for use tive loss of purchasing power. Edward Jones, Member SIPC Edward Jones Sean P. Asiala AAMS Edward Jones Michael C. Caley AAMS" Edward Jones Pam Covington CFP AAMS Edward Jones Tod Heisler AAMS Edward Jones Jason Korner CFP Edward Jones Quinn Nofziger Edward Jones Gwen Ruppert AAMS Edward Jones Karen Rupert AAMS Financial Advisor Financial Advisor 7127 Homestead Rd. Suite C Fort Wayne, N 46814 karen ruperttedwardores.com 263-4760 Making Sense of Investing Financial Advisor 14413 lieoin Rd Ste E Fort Wayne, IN 46814 Financial Advisor Financial Advisor Financial Advisor 7030 Pointe nvemess Way Suito 125 Fort Winyne, IN 404 432-3613 Making Sense of Investing Financial Advisor Financial Advisor 01 Chestnut Hils Parkway fort Wayne, iIN 40814 6525 Constitution Dr Fort Wayne, IN 404 7329 West Jetterson Bivd Fort Wayne, ItN 4604 7525 West Jetferson Bivd. 414 S. Scott Rd Fort Winyne, IN 46a04 Fort Wayne, N 40814 625-5700 Making Sense of Investing 432-0304 Making Sense of Investing 478-8038 Making Sense of lnvesting 444-3134 Making Sense of Investing 399-5853 Making Sense of Investing 625-3524 Making Sense of investing Financial Focus Should Inflation Affect Your Investment Moves? their goods such as firms that produce However, Treasury Inflation-Protect- As you know, inflation heated up in 2021, following years of pretty stable - and building materials or supply steel or other ed Securities (TIPS) can provide some pro low numbers. And now, early in 2022, we're still seeing elevated prices. As a con- sumer, you may need to adjust your ac- tivities somewhat, but as an investor, how should you respond to inflation? First, it helps to know the causes of this recent inflationary spike. Essential- ly, it's a case of basic economics strong demand for goods meeting inadequate supply, caused by material and labor short- counteract the effects of rising prices, you ages, along with shipping and delivery logjams. In other words, too many dollars chasing too few goods. Once the supply chain issues begin to ease and consumer spend ing moves from goods to services as the COVID-19 pandemic wanes, it's likely that inflation will moderate, but it may still stay above pre-pandemic levels throughout affect other types of investments? Think commodities to other businesses - can do well. Conversely, companies that sell non- essential goods and services, such as appli- but this principal is adjusted based on ances, athletic apparel and enter tainment, may struggle more when prices are rising. Of course, it's still a good idea to own a So, during periods of inflation, your prin- variety of stocks from various industries be- cipal will increase, also increasing your cause it can help reduce the impact of mar- interest payments. When inflation drops, ket volatility on any one sector. And to help though, your principal and interest pay- tection against inflation. The face value, or principal amount, of each TIPS is $1,000, changes in the U.S. Consumer Price In dex. ments will decrease, but you'll never re- might also consider investing in com panies ceive less than the original principal value that have a long track record of paying and when the TIPS mature. Talk to your finan- raising stock dividends. (Keep in mind, though, that these companies cial advisor to determine if TIPS may be are not obligated to pay dividends and can appropriate for you. reduce or discontinue them at any time.) Apart from stocks, how can inflation Ultimately, inflation may indeed be something to consider when managing your investments. But other factors - es pe- cially your risk tolerance, time horizon and about bonds. When you invest in a bond, you receive regular interest payments until long-term goals should still be the driv- the bond matures. But these payments stay ing force behind your investment decisions. 2022. Given this outlook, you may want to review your investment portfolio. First, consider stocks. Generally speaking, stocks the same, so, over time, rising inflation can A solid investment strategy can serve you can do well in inflationary periods because eat into your bond's future income, which companies' revenues and earnings may increase along with inflation. But some sectors of the stock market typically do bet- bond before it matures. The impact of ter than others during inflationary times. Companies that can pass along higher costs longer-term bonds because of the cumula- by your local Edward Jones Financial Advisor. to consumers due to strong de mand for may also cause the price of your bond to drop a concern if you decide to sell the well, regardless of whether prices move up or down. inflation is especially sharp on the price of This article was written by Edward Jones for use tive loss of purchasing power. Edward Jones, Member SIPC Edward Jones Sean P. Asiala AAMS Edward Jones Michael C. Caley AAMS" Edward Jones Pam Covington CFP AAMS Edward Jones Tod Heisler AAMS Edward Jones Jason Korner CFP Edward Jones Quinn Nofziger Edward Jones Gwen Ruppert AAMS Edward Jones Karen Rupert AAMS Financial Advisor Financial Advisor 7127 Homestead Rd. Suite C Fort Wayne, N 46814 karen ruperttedwardores.com 263-4760 Making Sense of Investing Financial Advisor 14413 lieoin Rd Ste E Fort Wayne, IN 46814 Financial Advisor Financial Advisor Financial Advisor 7030 Pointe nvemess Way Suito 125 Fort Winyne, IN 404 432-3613 Making Sense of Investing Financial Advisor Financial Advisor 01 Chestnut Hils Parkway fort Wayne, iIN 40814 6525 Constitution Dr Fort Wayne, IN 404 7329 West Jetterson Bivd Fort Wayne, ItN 4604 7525 West Jetferson Bivd. 414 S. Scott Rd Fort Winyne, IN 46a04 Fort Wayne, N 40814 625-5700 Making Sense of Investing 432-0304 Making Sense of Investing 478-8038 Making Sense of lnvesting 444-3134 Making Sense of Investing 399-5853 Making Sense of Investing 625-3524 Making Sense of investing